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1. The rst mass produced automobile was the Ford Model T, initially manufactured and sold in 1999 for $525. ination in the United States over

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1. The rst mass produced automobile was the Ford Model T, initially manufactured and sold in 1999 for $525. ination in the United States over the period 1999 to 2915 has averaged 3.19% per year. You just purchased a $23,999. You wonder what the cost of this same car might be 59 years from now when your son may be purcha similar car for his daughter (your granddaughter] so she can attend college. Also, you wonderwhat the value of T will be 59 years in the future, that is, in the year 2955. 2. The purchase price of Manhattan Island, where much of the city of New York is concentrated, in the year 162 After 391 years in 291?, you wonder what the value of the land might be, provided it has appreciated in value at 5% per year, every year. 3. Last week, your friend Jeremy borrowed $299 from a pawn shop operator because he was totally broke. He the operator $239 aer 1 week, but missed the payment. At rst, you thought this was "no big deal," but then s realize that the interest was $39 the rst week alone and would increase, compounded at the same rate until th was repaid. 1v'vheh yourfriehd told you he would pay off the loan in a year {provided the operator didn't come a gave him the results of your analysis. He was shocked and paid the total amount immediately. 4. In 1939, two people teamed up to manufacture and market electronic test equipment. By 195?, the initial cap' investment from themselves and a few friends that amounted to only $99,995.12 in 1939 had increased in value equivalent of $1 million. After this, the company skyrocketed to become a wond leader in electronic equipment, and a wide range of other products. If the net cash ow averaged $159,999 per year from 195? to 291? {99 yea same rate, these two individuals would be quite wealthy. 5. Assume that when your greatgrandmother was 25 years old, she received an engagement ring from her hus He paid $59 for the ring containing a single, highquality diamond. When she passed away at the age of 99, the to your grandmother, who kept it for 59 years and then gave it to your mother. After 39 years of keeping the ring place, she gave it to you on your 24th birthday. Today is your 39th birthday and you have just discovered the n drawer, forgotten for all these years. If this highgrade diamond has been now appraised as a collector's grade which has appreciated in value at an average rate of 4% per year, every year, since it was rst purchased, you what the ring might be valued at today

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